Bovis expects building costs to rise by 5%

Housebuilder records strong start to the year, but material and labour shortages are driving up costs

Bovis Homes has enjoyed a strong start to the new, but the housebuilder has warned that building costs are set to rise by 5%this year.

In a trading update for the period from 1 January 2014 to today, Bovis said it had 1,151 net private reservations over the period, a 24% increase year on year.

The firm said it had sold 2,096 units over the year to 9 May (2013: 1,176), an increase of 78% on the same period last year.

But the housebuilder said that while sale prices continued to rise, ahead of management expectations “ongoing capacity constraints in the material and labour supply markets, build costs for 2014 legal completions are expected to increase by circa 5%”.

“Positively, sales price increases are expected to at least cover this level of cost increase,” the firm added